The Great Flux: Why Gas Price Go Up and Down

By Ryan Skidmore

June 20, 2017

Hot Stuff

The market for gasoline and other petroleum based fuels, out there in the world, could be the gold standard for volatility. Firstly, supply and demand for the oil market is driven by most industries and most consumers in most of the world. Almost every industry, everywhere ever, uses vehicles and machinery that run on gas or diesel, wholly or partly, and every region in every place in the world adds to the mix. Petroleum is international. An industrial boom in some far-flung region of Asia can influence gas prices right here in the US of A. Second up, crude oil is major energy commodity, as in commodities trading, and as such is held captive to the triumphs and perils of the investing world. Think of any Wall Street movie. That frenzy and complexity that embodies the trading floor or a stock broker call room live closer to petroleum fuels than other more pedestrian staples, like paper or rubber. Number 3, the value of the US Dollar against other currencies can push gas prices up or down. The international nature of the oil market is responsible again here.

Summertime Sadness

During the summertime refineries switch to a different blend of fuel and additives, commonly known as “summer blend,” designed to reduce the evaporation of gas from gas tanks in hot summer weather, contributing to hydrocarbons in the atmosphere. (What is summerblend gas?) Typical of special accommodations, summer blend is more expensive to make that regular gas and refineries pass the cost along to consumers. Summer time is also hurricane season for much of the US. Refineries find it difficult to operate during and after hurricanes. Don’t we all. Outages and damages all drive up the cost of making sweet, sweet gasoline.

Closed for repairs

Regular upkeep is performed in fall and spring, causing refineries to close and stop production. (Why gas prices rise and fall?) Reduced supply drives prices up. Particularly in spring, when demand is rising does reduced supply noticeable drive up prices.

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